Government Home mortgage Refinance Program

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The Home Affordable Refinance Program (or HARP) is a government program which was designed to help consumers refinance their homes.

In some cases, homeowners had difficulty qualifying for loan modifications or refinancing due to dropping home prices. Many homeowners found themselves “underwater“, a situation where their home loan cost more or almost as much as the price of their home.

HARP was setup for consumers who have made all of their mortgage payments, but are unable to refinance and reduce their monthly payment.

Under traditional circumstances, banks require a certain loan-to-value ratio for a homeowner to qualify for refinancing. After the housing market crashed, a borrower still owed the same amount on their loan, but their home’s value dropped significantly.

Due to this fact, the Obama administration created the HARP program to create financial relief for these homeowners and allow them to change the terms of their loan. They would be allowed to refinance without the need for private mortgage insurance, which would be required if the loan-to-value ratio is more than 80%. The cost of private mortgage insurance would erase any of the savings that incurs from the refinance.

There have been some updates to the HARP program including 2.0 changes and soon 3.0 changes. The recent updates for 2.0 included increases in the loan-to-value ratio. The changes expanded to include homeowners who have ltv ratios of 125%.

What is required to qualify for HARP?

In order for a homeowner to qualify for Obama’s Home Affordable Refinance Program, a homeowner will need to meet certain criteria:

1) The homeowners mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.

2) Freddie Mac or Fannie Mae must have acquired this loan before the date of May 31 2009.

3) This mortgage must have not refinanced through the HARP program previously.

4) The payments for this mortgage must be current, without late payments for the last 6 months or 1 or less late payment for the last 12 months.

5) There must be an LTV ratio of 80% or more.

6) A homeowner who uses the HARP program must have some type of benefit including a reduction in interest rate or monthly payment.

HARP 2.0 and HARP 3.0

There have been updates to the HARP program which was created in 2009.

These updates include the 2.0 update which increased the loan-to-value ratio that homeowners needed in order to qualify for the program. The program was changed to include homeowners that had LTV ratios of 125%.

HARP 2.0 helps homeowners refinance by allowing them to refinance through any lender. Some lenders may or may not want to refinance if a homeowner has Private Mortgage Insurance. HARP 2.0 requires the newer refinanced loan to have the same amount of coverage as the loan originally had.

For properties that were bought as an investment, HARP 2.0 may have higher interest rates than properties which are lived in by their owners.


Growth on the Horizon.(First Horizon Home Loan Corporation): An article from: Mortgage Banking
Book (Mortgage Bankers Association of America)

Part II

2010-02-21 20:18:41 by Sir_Scum

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29. Better body armor is now being provided to our troops
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  • Avatar Dolan A Is there a government refinance assistance program available?
    Apr 15, 2009 by Dolan A | Posted in Renting & Real Estate

    I have decent income and credit, but not a good home mortgage. I want to refinance but my loan is above the market s value, and my loan is not with Fannie Mae nor Freddie Mac. Is there any government program that will get me a loan without mortgage insurance? I checked out MakingHomeAffordable.gov, and the site says, I don t quality for any of the available options.Any other suggestions?

    • Im not sure why you need a gov loan if you have good income and good credit. You wont have to get mortgage insurance if you get a 80/20 or an 80/10/10 FYI watch out for people that want to sell you loan modification a lot of them are scams. They give you a Hard money loan. In the fine print these loans say that if you miss one payment they can take your house. The government has FHAsecure for people that need help with foreclosure. But again i dont think you need a govt program. Im licensed in 50 states I can help you out. Mark Shidler Free Cruise Mortgage Specialist Ask me about how to get …